Guaranteed Stop Loss Orders (GSLO's)

[Captain_Chaza]

Do they Work?
Did they work for you "This time?"

What I am asking is
Did you get your GSLO's "Executed" when you needed them to "WORK the MOST" this time?

Salute and Bon Voyage

 

[hangseng]

Do they Work?
Did they work for you "This time?"

What I am asking is
Did you get your GSLO's "Executed" when you needed them to "WORK the MOST" this time?

Salute and Bon Voyage

Yes, being out of the market has guaranteed stop loss for me.

Seriously though I have only placed a few small day trades in this market and yes the GSL worked a treat on one occasion. IG Markets won't permit GSL in this market though on most stocks, just on indices.

I remain out and counting the days now for re-entry to the direct market in longs. If the DJIA reaches the dizzy heights it was before all of this started a few short weeks ago, then get ready for a severe correction or at least a rapid re-test of the recent lows.

The technical similarity to Oct '87 is clearly evident now with a head and shoulders pattern emerging and within days we will see how close it actually is to either confirm this or just to move on up in the next bull rush. I tend to believe the bears are just sharpening their claws ready to rip into the unsuspecting prey. Don't trade derivatives or any thing else without a GSL in this market, or just stay out. If you are in margin loans and in profit now, perhaps prudent to take the profit or to at least seek professional opinion from your broker on your position in this market.

 

[Porper]

IG Markets won't permit GSL in this market though on most stocks, just on indices.

I have had guaranteed stops on some mid cap stocks this past week, no problem at all with IG Markets.10% is the limit though, not 5%.Stops can be moved up along with the price while the market is open.

My tactic was to take some momentum trades and move the stop up along with price, if a nasty surprise happens, losses are minimal.

A large chunk of profits are taken with all the commision though.

 

[Captain_Chaza]

As you can see in the chart below

Last week was very diferrent from the week before!!!

I was just wondering if anybody did an Enron and turned the power off?
OR
Did anyone suffer "Internet Overload" and have their GSLO lost in cyberspace

Were your well defined Guaranteed Sell Orders Guaranteed when the sh't hit the fan the week before last?

Salute and Bon Voyage

 

[kerosam]

Hi folks,

when i open a position with a GSLO, is it common for the CFD provider to charge the GSLO fee before it is executed?

thanks in advance

 

[GFD]

Does anyone have updates on the current costs and limitations of GSLOs for share trading? There was mention of a 5% or 10% limit being the minimum gap to guarantee the price below the current price.

Is it possible to set a guaranteed trailing stop?

Also when using conditional orders for trailing stops when share trading, I have found these don't always execute due to the market spread. What are some of the strategies for dealing with this? Is it worth setting the conditional trigger with some margin above the actual stop price, like 1%? How does this compare to the fees of GSLOs for say a $10K trade?

Cheers

 

[skyQuake]

Does anyone have updates on the current costs and limitations of GSLOs for share trading? There was mention of a 5% or 10% limit being the minimum gap to guarantee the price below the current price.

Is it possible to set a guaranteed trailing stop?

Also when using conditional orders for trailing stops when share trading, I have found these don't always execute due to the market spread. What are some of the strategies for dealing with this? Is it worth setting the conditional trigger with some margin above the actual stop price, like 1%? How does this compare to the fees of GSLOs for say a $10K trade?

Cheers

My information is regarding IG Markets - your mileage may vary with other providers.

Costs - from 30bps to 100bps (usually around 30bps) on stocks.
Min distance away - Depends on the volatility of the underlying stock - on banks its 5%, on FMG its 20% and GSLOs won't even be offered on some volatile small caps. I have also noted that they greatly increase the GSLO min distance before earnings - Apple pre-earnings went from 5% GSLO distance to 16% min distance.
Is it worth it - Thats the million dollar question. In general its not, you'll get some slippage here and there but losing up to 100bps on every trade really adds up.
If you are holding a stock that is say waiting on a very major court ruling/FDA approval/big contract, then its probably worth considering.

 

[GFD]

Thanks skyQuake, so I am coming to the conclusion that using conditional orders with a trigger price and allowing it to execute at market to limit maybe the simplest option.

This type of order is free, but will be subject to the spread due to market depth. If that's less than 30bsps difference then its better value to execute at market which should be the case for most liquid shares like asx200.

The only other risk I see is the speed of algorithms trading this out. Is there anything else worth considering in setting the exit trade when it comes to brokerage and market depth?

 

[GFD]

Thanks skyQuake, so I am coming to the conclusion that using conditional orders with a trigger price and allowing it to execute at market to limit maybe the simplest option.

This type of order is free, but will be subject to the spread due to market depth. If that's less than 30bsps difference then its better value to execute at market which should be the case for most liquid shares like asx200.

The only other risk I see is the speed of algorithms trading this out. Is there anything else worth considering in setting the exit trade when it comes to brokerage and market depth?

Investigating this further with my broker, I would prefer my stops to execute automatically but my broker doesn't offer market to limit exit price in conditional orders. So I have decided to apply a 30bsp margin to the larger stocks and monitor how they execute.

For stocks outside the asx200 I am going to try a 1c margin between the trigger and exit price (as only 1c increments are allowed by the market/broker). Presumably these would be the costs for a small time retail trader that are exploited by some algorithms on the market?

I would still rather pay this small penance than not have the order execute and be up for unlimited losses in the event of a crash. Of course, all positions taken will have to pass my TA screens and stay above those criteria to be worthy of staying in the portfolio and monitoring the macro conditions.

Any other suggestions?